Sri Lankan government continues to protect ceramic industry in Budget 2018 says BRS report
The government of Sri Lanka has reportedly retained most of the protection provided to the local ceramic industry through import tariffs.
A news report quoting an analysis by a brokerage states that the protection offered to the ceramic industry is despite further liberalisation of the economy proposed in the 2018 Budget proposals presented last week.
Protectionism still prevails in the ceramic sector, Bartleet Religare Securities (BRS) has reportedly said in a note to clients that analyzed the budget presented to parliament by Finance Minister Mangala Samaraweera.
Listed tile companies, Royal Ceramics Ltd., Lanka Tile and Lanka Walltiles Ltd., “remain protected for the moment,” BRS has said.
The latter two tile firms are now part of the Royal Ceramics group, which makes tiles and sanitaryware.
“With the present government keen on liberalizing many protected local manufacturing industries, the ceramic sector had threat of having the cess on imported tiles removed,” the report has noted.
“However, the industry remains protected, albeit many para tariffs were removed from the present budget.”
The budget however indicates the need for sufficient local competition in increasing efficiency and innovation, the report has stated.
The report has also noted the strong emphasis given for anti dumping laws to support local industries and to strengthen consumer protection.
BRS said there was a total duty of 90% on the tiles sector with import cess of 35%, Customs duty of 30% or Rs100 per square metre, Value Added Tax of 15%, Nation Building Tax of 2% and the Port and Airport Levy of 7.50%.
The study report indicating the continuity of the protection offered to the ceramic industry by the Sri Lankan government notes that investments in the ceramic industry could bring in healthy dividends to the relevant investors.
|Article Code :||VBS/AT/13112017/Z_4|